Brookfield to buy $1.1 bn industrial company for oppo fund

The publicly-traded real estate business of the Toronto-based alternative asset management firm has agreed to buy Industrial Development International for $1.1 billion, marking its second industrial platform investment in as many months.

Brookfield Property Partners has agreed to buy Industrial Developments International from the US subsidiary of Japanese construction company Kajima Corporation for $1.1 billion. The transaction is scheduled to close during the fourth quarter.

The IDI purchase was reportedly made on behalf of Brookfield’s first global real estate opportunity fund, Brookfield Strategic Real Estate Partners, which closed on $4.4 billion of commitments last month. Brookfield Property Partners, the commercial real estate platform of Brookfield Asset Management that was spun-out as a publicly-traded entity this year, committed approximately 25 percent of the equity in the fund. 

Atlanta-based IDI is the owner and operator of 75 distribution facilities totaling 27 million square feet in 12 states, and additionally has 49 million square feet of future development projects and a third-party property management business. With the acquisition of IDI, Brookfield will become one of the world’s largest global owners of industrial real estate, a relatively new property type for the company. Its industrial portfolio now will comprise more than 62 million square feet of operating assets, as well as more than 79 million square feet of potential future development, in North America, Europe, the Middle East and China. 

The IDI purchase marks Brookfield’s third corporate acquisition in industrial real estate on behalf of BSREP. In June, Brookfield led the takeover of European logistics developer EZW Gazeley, which owns 5.64 million square feet of logistics warehouses and distribution parks across the UK, Western Europe and China, for a reported £370 million. Last year, the firm acquired an 81 percent stake in Verde Realty, a Houston-based REIT that develops and invests in industrial properties, in an $886 million transaction.